The biggest mistake entrepreneurs make when looking at whether or not to rent or buy? Thinking you can do it yourself, says Dianne Usher, president of the Toronto Real Estate Board. Google all you want, says Usher, but it won’t make you an expert. Smart business owners will find an accountant and a lawyer to advise them.
On today’s PROFIT BusinessCast, Usher discusses the pros and cons of renting versus buying when you’re looking for office space.
Pro: There’s no long-term commitment and you’re not vulnerable to local market economies if you need to sell.
Con: You can be restricted if you need to upsize or downsize. There may also be restrictions on your usages or any improvements you might want to make.
Usher’s tip: Ensure that your lease allows you to downsize and sublease—and watch out for the disruption clause.
Pro: More and more entrepreneurs are choosing to buy duplexes and convert them into office space. One of the biggest benefits to owning a condo or house is that you can leverage your equity to help finance your business if you’re having cash flow issues.
Con: Markets can be volatile, which means your great investment (and source of equity) is potentially at risk.
Tip: The pros only outweigh the cons here in certain regions and industries.
Listen to the podcast for Usher’s advice on what conditions make buying the right choice and what to do once you’ve made the decision to buy.